The federal government kept the annual contribution for a Tax-Free Savings Account (TFSA) at $6,000 in 2021. This increased the cumulative contribution room to $75,500. That is a good amount of room for investors to maneuver, no matter what their investment strategy. Today, I want to explore a dividend investing strategy. Below are three dividend stocks that have earned their all-star status in recent years. Let’s dive in.
This stock offers a strong 5.4% yield
Capital Power (TSX:CPX) is the first dividend stock I want to look at for a TFSA today. This Edmonton-based company develops, acquires, owns, and operates power generation facilities in North America. Its shares have climbed 7.9% in 2021 as of early afternoon trading on April 9. The dividend stock is up 32% from the prior year.
In Q4 2020, Capital Power delivered adjusted EBITDA of $220 million – down from $352 million from the prior year. For the full year, revenues were down marginally to $1.93 billion. However, diluted earnings per share rose to $0.77 – up from $0.72 in 2019.
TFSA investors should look to this dividend stock that still offers favourable value in the early spring. Capital Power last paid out a quarterly dividend of $0.512 per share. That represents an attractive 5.4% yield.
A dividend all-star in the surging oil space
In February, I’d suggested that investors should look to energy stocks as oil and gas prices rose. Pembina Pipeline (TSX:PPL)(NYSE:PBA) is a Calgary-based company that provides transportation and midstream services for the energy industry. Its shares have climbed 20% so far this year. The dividend stock is up 28% compared to the same time in 2020.
Total revenues came in at $1.69 billion in the fourth quarter of 2020 – down marginally from $1.75 billion in Q4 2019. For the full year, adjusted cash flow from operating activities rose to $2.28 billion over $2.23 billion over the last year. Adjusted EBITDA increased to $866 million over $787 million in Q4 2019 and jumped to $3.28 billion in 2020 – up from $3.06 billion.
TFSA investors on the hunt for a monthly stipend should pursue Pembina. The dividend stock boasts a monthly dividend of $0.21 per share. That represents a tasty 6.8% yield.
One more dividend stock to add to your TFSA in April
Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) is the last all-star dividend stock I want to look at today. It is the fifth-largest of the Big Six Canadian banks. CIBC stock has climbed 14% so far in 2021. Shares have climbed 43% from the prior year.
The bank reported adjusted net income of $1.64 billion in the first quarter of 2021. This was up 11% from Q1 2020 and 28% from the previous quarter. Adjusted diluted earnings per share delivered growth of 10% year-over-year and 28% from the fourth quarter of 2020. Canadian banks are well-positioned to gain big as the domestic and global economy recovers this year.
CIBC last paid out a quarterly dividend of $1.46 per share, which represents a solid 4.7% yield. Its shares last had a favourable P/E ratio of 13. CIBC is perfect for TFSA investors who want balanced growth, income, and good value.
